Does the Subscription Business Model for E-commerce Really Work?

The subscription model is a new trend in e-commerce.  Why spend countless hours shopping in malls or browsing online when you can easily receive a box of new clothes in the mail each month?  It sounds like a great idea on paper, but do the benefits outweigh the drawbacks?

The San Francisco startup Stitch Fix presents itself as a personal styling service that handpicks and delivers specific pieces for each client.

Fix_3Stitch Fix’s professional stylists gather information about their clients’ size, body shape, and budget from a detailed profile with pictures.  They handpick five items based on the client’s preference and their own professional expertise, and ship the selection to the client for review.  The recipient pays for only the items they like. Stitch Fix also charges a styling fee of $20, which can be applied as a credit toward anything the client chooses to keep.

This business model definitely has benefits:

  • Not all women like to shop; in fact, many loathe it.  Shopping is time-consuming, no matter if you are browsing at the mall or online.  And it’s not always a satisfying experience either, and often involves a lot of dressing and undressing, talking to annoying salespeople, and standing in long lines for fitting rooms and at the checkout counter.  Many women would be happy to delegate this activity to professionals.
  • Another great benefit is having a professional stylist to assist you.  I imagine that a Stitch Fix stylist usually spends no more than 30 minutes analyzing a client profile, and can recommend items that will push your boundaries when it comes to style.  And chances are you’re going to love the results.

What about the drawbacks?

  • Returning items, leaving feedback, and updating your profile can be a little time-consuming, at least in the beginning.  But often these issues get worked out over time thanks to the ability to track your preferences.
  • Matching new garments to the rest of your wardrobe can be tricky.  What if you buy a piece you love, but can’t wear it with anything?  In theory, you can provide your stylist with a pictorial database of all your clothes, allowing them to match items based on your style preferences.  But obviously this is easier said than done.

Stitch Fix is not the only business using the e-commerce subscription model.  Companies like BirchBox send a monthly package filled with handpicked cosmetic product testers, while stores like True&Co and AdoreMe can help you to choose the lingerie that best fits your style.

The e-commerce subscription business model has great potential.  We live in a time when most consumers prefer shopping online, and any company that can enhance the online shopping experience has a greater chance for success.

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Posted in Business Trends

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I am Jane Zhdanova, an enthusiastic internet marketer and fashion lover. I'm combining my two passions in this blog where I’m writing about new technologies, business and marketing trends in the fashion industry.

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